The Ypsilanti Public Schools didn't have to turn to pay-less paydays for teachers and staff during its low cash-flow periods in December and January, leaving Superintendent Dedrick Martin "cautiously optimistic" about finances.

"I believe we will be able to meet our financial obligations for the rest of this school year," Martin said. "As long as we continue to watch our expenditures and to control and contain costs whenever possible."

Ypsilanti Public Schools Superintendent Dedrick Martin and student Aidan Brennan explore some of the dictionary's features in this 2011 file photo.

AnnArbor.com file photo

Martin's remarks to AnnArbor.com came only minutes after learning a pipe had burst in the district's administration building. He explained unexpected malfunctions and repairs are what keep him from definitively saying staff can expect every paycheck from now until June.

"More than likely we'll be fine," he said. But Martin's caution stems from the fact that the district has "no cushion."

"If we had money in the bank, if we had a fund balance, we wouldn't have needed to sound the alarm," he said.

In July 2012, Ypsilanti officials alerted district employees of a cash-flow problem that could prevent staff from receiving paychecks at various points throughout the school year.

The district made it through the low points in September and December. It also was projected to have insufficient funds to pay employees on time in January and February.

However, the district received some additional information earlier this month about its maintenance of effort special education funding that has led school officials to proclaim they'll make it through the year. This funding is given to districts for maintaining the same level of program costs per student from year to year.

Martin said the state analyzes cost-per-student ratios annually to ensure special education students are having their needs adequately met and to prevent districts from cutting costs or services too rapidly.

At the start of this fiscal year, July 1, 2012, Ypsilanti was informed it had done just that — cut costs in this department too rapidly. It was at risk of being docked about $1.5 million in maintenance of effort funding because of this.

Prior to July, when approving its 2012-13 academic year budget, Ypsilanti Public Schools reduced its special education staff by about 45 positions. When school officials learned about the $1.5 million loss in funding, they recalled a number of those special education staff.

Martin said by cutting these 45 positions, the district was actually "right-sizing" itself and, in a sense, was punished for being more fiscally responsible.

"We were overstaffed in this area. (The cuts) were to make us more in line with the minimum requirements by law and with the (special education) services of other districts," he said. "It seemed so bad at the time, what we were doing, to the outside person. But we had not been diligent. For years we had the luxury of having more staff."

Martin said school officials were not notified until recently whether they would receive all of the district's maintenance of effort money. He said some is still up in the air.

Special education retirements and resignations do not count against the school district; and throughout the current academic year, YPS has had some resignations and retirements that it did not refill to bring the special education department back to "about where we need to be" as far as staffing, Martin said.

He said if the district had a fund balance, school officials likely would not even be talking about the slight possibility of this special education money still impacting paychecks.

"It feels wrong to people or like scare tactics, but we want to be transparent," he said.

And when unanticipated things happen — like a pipe bursts or a boiler stops working — it can impact a cushion-free budget "significantly."

Martin described it as similar to a personal or household budget that's impacted when a car breaks down.

Typically, Ypsilanti Public Schools and Willow Run Community Schools would be starting their budget processes for the next school year within the coming month. Martin said normally by February, he's looking at state foundation allowance trends and student enrollment trends.

"But there is no trend data for closing two schools and creating a new one out of thin air," he said.

Ypsilanti and Willow Run will merge effective July 1. The new unified district, which should receive an official name Feb. 4, will open its doors to students in September.

How much the new district's operating budget will be is still unknown. Martin said school officials will work closely with budget experts from the Michigan Department of Education, the State Treasury Department and other local consultants to make some sound projections in the coming months.

Surveying parents and community members about where they intend to enroll their students will be important, he said.

"We also won't be saddled with presuppositions about teachers and programs. We'll be starting from scratch and as long as we do so conservatively, (creating the new district's budget) will be mission challenging, not mission impossible."

Comments

kittykat73

Fri, Feb 1, 2013 : 11:23 a.m.

Once again Ann Arbor.com you are not giving Willow Run a chance to let the reader of your column to hear all of the things going on at Willow Run. Why??? This district has moved forward by leaps and bounds under the leadership of Superintendent Lisiscki. Why are we not hearing from her? Where are pictures of her? PLEASE GIVE EQUAL TIME TO THIS DISTRICT! There are many positive things going on there also.

Danielle Arndt

Fri, Feb 1, 2013 : 3:02 p.m.

kitty, thanks for your comment. The purpose of this story, and the reason it featured Ypsilanti's superintendent, was to follow up on the threat of pay-less paydays for Ypsilanti's teachers and to let readers know where the district stands now, as far as being able to meet its compensation obligations to its employees. You are correct that Willow Run has made a number of significant improvements to its finances and in the past two years especially. It is not projected to have a current-year structural deficit, nor did officials need to enact any mid-year reductions. You can read a little more about that here: http://www.annarbor.com/news/ypsilanti/ypsilanti-willow-run-pass-amended-budgets-deficit-elimination-plans-totaling-119m-in-debt/ and here: http://www.annarbor.com/news/ypsilanti/mid-year-teacher-layoffs-pay-less-paydays-still-possible-for-ypsilanti-schools-despite-consolidation/. But I appreciate the comment. It was a good reminder for me to follow up with Willow Run.

YpsiLivin

Wed, Jan 30, 2013 : 5:03 p.m.

&quot;Cautious optimism&quot; is what brought the Ypsilanti school district to its current fiscal state. Instead of budgeting for declining enrollment, which has been the trend for several years running, the district continues to budget for increases in enrollment.
Please. There are fewer school-aged children today than there were 10 years ago. (The birth rate in Michigan in 2008 was 13% lower than the national average. Children born in 2008 will be starting school this year, and there are a lot fewer of them than there would be in an &quot;average&quot; year.)
There are more &quot;options&quot; for parents in the form of public charter schools. Parents have grown tired of turning their children over to failing schools, and the public has no appetite to pay for gross mismanagement and continuous failure.
If the new district does NOTHING ELSE, please don't budget for an increase in enrollment this year. In fact, don't even assume that the enrollment will stay stable. (It will not.) Budget for a drop in enrollment. If more students come - fine; the district will have extra money. If &quot;cautious optimism&quot; continues to rule the budget process, the debt will only grow larger.

beardown

Wed, Jan 30, 2013 : 2 p.m.

&quot;But there is no trend data for closing two schools and creating a new one out of thin air,&quot; he said.&quot;
How about the current size of the two districts, with a small penalty for parents who are going to leave because they oppose the merger?
And the public lobbying for the new position begins. And since the new board ruled to possibly hire one of the old superintendents without even interviewing new candidates, we could just have the same old people back in the same old positions in the supposedly new district.
If it failed heinously once, why not just try it again?